The black and white segment is in the past.And Teddy(Joe Pantoliano) tricks Leonard(Guy Pearce)into thinking that Natalie(Carrie Ann-Moss)'s boyfriend Jimmy Grant(Larry Holden)is Leonard'Wife's killer.Teddy leads Lenny to the abandoned place at the start of the film.Jimmy comes to the place and Lenny tells him to remove his shirt and jeans.And Lenny tries to kill Jimmy,but he tells Lenny that he can have the drug money in his car's trunk.Though,he kills Jimmy by strangling him.He takes his clothes and his picture and drags Jimmy's body down stairs,but Jimmy says a dying word "Sammy".Then, he sees Teddy outside and pretends he lost his memories and brings Teddy inside hits him on the head with an object.He tells Teddy why Jimmy knows Sammy and Teddy tells him that he always says about Sammy.And he tells Lenny that his wife actually survived the rape and died the same way that Sammy's wife died,the insulin overdose by Lenny accidentally killing her.And Teddy was hired to get the real killer.Teddy claims that the real killer is just a local with no connections and they had killed him years ago.And Teddy says that he's John G,but not the killer.But Lenny forgot about the entire thing and started making puzzles that are impossible to solve and Teddy took the picture of him getting the John G killed his wife tattoo.Then Lenny claims that Sammy Jankis is a fraud and says that the way of the death is Sammy's wife.Teddy claims that Sammy is a baker and never had a wife.Then, Lenny takes Teddy's gun and drops the ammunitions on his jeep's seat.And takes a picture of Jimmy's car so that he can think that it's his car then takes teddy's car key and throws it in a grass.And writes "Don't believe his lies" on Teddy's picture.Then he goes to a tattoo shop to have Teddy's license plate written on his body.Thus, explaining the theory throughout the movie.
Continuity mistake: In the scene in which Leonard writes on the back of his picture of Teddy, "He is the one. Kill him," we see a shot of Leonard placing the picture on top of his tan jacket on the bed as he goes to write on it. Then, it goes to a close-up of the picture in which the jacket has disappeared and the picture is lying directly on the blue bedspread. It actually happens twice within that same scene. (00:15:15)
Leonard Shelby: I have to believe in a world outside my own mind. I have to believe that my actions still have meaning, even if I can't remember them. I have to believe that when my eyes are closed, the world's still there. Do I believe the world's still there? Is it still out there?. Yeah. We all need mirrors to remind ourselves who we are. I'm no different.
Trivia: In the scene where Lenny is on the phone describing how Sammy Jenkis ends up in a home due to the death of his wife, it shows Sammy sitting in a chair looking towards the camera. Sammy is temporarily blocked from our view by someone walking in front of him. As the person passes by, it is not Sammy that re-appears, but Lenny. To see it well, you will have to use the frame-by-frame mode. There are about 5 visible frames of Lenny in the home, and then it cuts back to him inside the motel room talking on the phone again. (01:29:55)
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